March 2009 Decisions on Civil, Commercial and Labor Laws

Here are selected March 2009 decisions on civil, commercial and labor laws:

Civil Law

Family home.  A family home is generally exempt from execution, provided it was duly constituted as such. It is likewise a given that the family home must be constituted on property owned by the persons constituting it. As pointed out in Kelley, Jr. v. Planters Products, Inc.:  “[T]he family home must be part of the properties of the absolute community or the conjugal partnership, or of the exclusive properties of either spouse with the latter’s consent, or on the property of the unmarried head of the family.”   In other words, the family home must be established on the properties of (a) the absolute community, or (b) the conjugal partnership, or (c) the exclusive property of either spouse with the consent of the other. It cannot be established on property held in co-ownership with third persons. However, it can be established partly on community property, or conjugal property and partly on the exclusive property of either spouse with the consent of the latter. If constituted by an unmarried head of a family, where there is no communal or conjugal property existing, it can be constituted only on his or her own property. Therein lies the fatal flaw in the postulate of petitioners. For all their arguments to the contrary, the stark and immutable fact is that the property on which their alleged family home stands is owned by respondents and the question of ownership had been long laid to rest with the finality of the appellate court’s judgment in CA-G.R. CV No. 55207. Thus, petitioners’ continued stay on the subject land is only by mere tolerance of respondents.  Simeon Cabang, et al. vs. Mr. & Mrs. Guillermo BasayG.R. No. 180587, March 20, 2009.

Mortgage;  ownership of mortgaged property. For a person to validly constitute a mortgage on real estate, he must be the absolute owner thereof as required by Article 2085 of the New Civil Code. In other words, the mortgagor must be the owner; otherwise, the mortgage is void.  Del Rosario was NOT the owner of the 5,546-sq.- meter portion of the 6,368-sq.-meter lot, so she could not have mortgaged the same to PCIB. There being no valid mortgage of the said portion to PCIB, it could not be subjected to foreclosure; it could not be sold at the public auction; it could not be bought by PCIB as the highest bidder at the public auction; and it could not be assigned by PCIB to NIDC.  National Investment and Development Corp. vs. Sps. Francisco and Basilisa BautistaG.R. No. 150388.  March 13, 2009.

Mortgage;  redemption period.  The one-year redemption period should be counted not from the date of foreclosure sale, but from the time the certificate of sale was registered with the Register of Deeds.  In this case, therefore, the one-year redemption period should be reckoned from the time the certificate of sale was registered on 27 October 1971.  The law speaks of “one year” period within which to exercise redemption. Under Article 13 of the New Civil Code, a year is understood to be of three hundred sixty-five (365) days. Applying said article, the period of one year within which to redeem the properties mortgaged to Banco Filipino by the Spouses Bautista shall be 365 days from 27 October 1971. Thus, excluding the first day and counting from 28 October 1971, and bearing in mind that 1972 was a leap year, the redemption of the properties in question from Banco Filipino could only be made until 26 October 1972.  National Investment and Development Corp. vs. Sps. Francisco and Basilisa BautistaG.R. No. 150388.  March 13, 2009.

Mortgage;  possession after foreclosure.   A stipulation allowing the mortgagee to take actual or constructive possession of a mortgaged property upon foreclosure is valid. In Agricultural and Industrial Bank v. Tambunting, the Supreme Court explained: “A stipulation … authorizing the mortgagee, for the purpose stated therein specified, to take possession of the mortgaged premises upon the foreclosure of a mortgage is not repugnant [to either Article 2088 or Article 2137]. On the contrary, such a stipulation is in consonance or analogous to the provisions of Article [2132], et seq. of the Civil Code regarding antichresis and the provision of the Rules of Court regarding the appointment of a receiver as a convenient and feasible means of preserving and administering the property in litigation.  Development Bank of the Philippines vs. Spouses Jesus and Anacorita DoyonG.R. No. 167238.  March 25, 2009.

Common carriers;  liability.  Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods transported by them. Subject to certain exceptions enumerated under Article 1734 of the Civil Code, common carriers are responsible for the loss, destruction, or deterioration of the goods. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them. For marine vessels, Article 619 of the Code of Commerce provides that the ship captain is liable for the cargo from the time it is turned over to him at the dock or afloat alongside the vessel at the port of loading, until he delivers it on the shore or on the discharging wharf at the port of unloading, unless agreed otherwise. In Standard Oil Co. of New York v. Lopez Castelo, the Court interpreted the ship captain’s liability as ultimately that of the shipowner by regarding the captain as the representative of the ship owner. Lastly, Section 2 of the COGSA provides that under every contract of carriage of goods by sea, the carrier in relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods, shall be subject to the responsibilities and liabilities and entitled to the rights and immunities set forth in the Act. Section 3 (2) thereof then states that among the carriers’ responsibilities are to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.  Philippines First Insurance Co., Inc. vs. Wallem Phils. Shipping, Inc., et al., G.R. No. 165647, March 26, 2009.

Commercial Law

Piercing Corporate Veil;  parent-subsidiary.  Circumstances which are useful in the determination of whether a subsidiary is but a mere instrumentality of the parent-corporation, to wit:  (1)  the parent corporation owns all or most of the capital stock of the subsidiary;  (2)  the parent and subsidiary corporations have common directors or officers;  (3)  the parent corporation finances the subsidiary;  (4)  the parent corporation subscribes to all the capital stock of the subsidiary or otherwise causes its incorporation;  (5)  the subsidiary has grossly inadequate capital;  (6)  the parent corporation pays the salaries and other expenses or losses of the subsidiary;  (7)  the subsidiary has substantially no business except with the parent corporation or no assets except those conveyed to or by the parent corporation;  (8)  in the papers of the parent corporation or in the statements of its officers, the subsidiary is described as a department or division of the parent corporation, or its business or financial responsibility is referred to as the parent corporation’s own;  (9)  the parent corporation uses the property of the subsidiary as its own;  (10)  the directors or executives of the subsidiary do not act independently in the interest of the subsidiary, but take their orders from the parent corporation;  (11)  the formal legal requirements of the subsidiary are not observed.  Pantranco Employees Asso., et al. vs. NLRC, et al./Philippine National Bank Vs. Pantranco Employees Association Inc., et al., G.R. No. 170689/G.R. No. 170705, March 17, 2009.

Labor Code

Compensable illness. Cordero has substantially proved her claim to compensability. Under Section 1(b), Rule III implementing P.D. No. 626, sickness or death is compensable if the cause is included in the list of occupational diseases annexed to the Rules. If not so listed, compensation may still be recovered if the illness is caused or precipitated by factors inherent in the employee’s work and working conditions. Here, strict rules of evidence are not applicable since the quantum of evidence required under P.D. No. 626 is merely substantial evidence, which means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” What the law requires is a reasonable work-connection and not a direct causal relation. It is sufficient that the hypothesis on which the workmen’s claim is based is probable since probability, not certainty, is the touchstone. Government Service Insurance System Vs. Maria Teresa S.A. Cordero/Employees Compensation Commission Vs. Maria Teresa S.A. Cordero, G.R. No. 171378/G.R. No. 171388, March 17, 2009.

Constructive dismissal. Case law holds that constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. Respondent’s sudden, arbitrary and unfounded adoption of the two-day work scheme which greatly reduced petitioners’ salaries renders it liable for constructive dismissal. Fe la Rosa, et al. Vs. Ambassador Hotel, G.R. No. 177059, March 13, 2009.

Declaration of illegality of strike.  Article 264(e) of the Labor Code prohibits any person engaged in picketing from obstructing the free ingress to and egress from the employer’s premises. Since respondent was found in the July 17, 1998 decision of the NLRC to have prevented the free entry into and exit of vehicles from petitioner’s compound, respondent’s officers and employees clearly committed illegal acts in the course of the March 9, 1998 strike. The use of unlawful means in the course of a strike renders such strike illegal. Therefore, pursuant to the principle of conclusiveness of judgment, the March 9, 1998 strike was ipso facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary. Jackbilt Industries, Inc. Vs. Jackbilt Employees Workers Union-Naflu-KMU, G.R. No. 171618-19, March 13, 2009.

Employment of registered nurse. Article 157 does not require the engagement of full-time nurses as regular employees of a company. Under Article 157, Shangri-la, which employs more than 200 workers, is mandated to “furnish” its employees with the services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic which means that it should provide or make available such medical and allied services to its employees, not necessarily to hire or employ a service provider. While it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees, nothing is there in the law which says that medical practitioners so engaged be actually hired as employees. The law only requires the employer “to retain”, not employ, a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours. The phrase “services of a full-time registered nurse” should thus be taken to refer to the kind of services that the nurse will render in the company’s premises and to its employees, not the manner of his engagement. Jerome D. Escasinas, et al. Vs. Shangri-la’s Mactan Island Resort, et al., G.R. No. 178827, March 4, 2009.

Part-time employment.  For a private school teacher to acquire permanent status in employment, the following requisites must concur: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years of service; and (3) such service must have been satisfactory. The burden is on petitioners to prove their affirmative allegation that they are permanent teaching personnel. However, there is not enough evidence on record to show that their total working day is devoted to the school. There is no showing of what the regular work schedule of a regular teacher in respondent school is. What is clear in the records is that Evelyn and Alwyn spent two hours and four hours, respectively, but not the entire working day, at the respondent school. They do not meet requirement “c” of Section 45 of the Manual. Hence, we sustain the findings of the Court of Appeals that the petitioners are part-time teachers. Being part-time teachers,they cannot acquire permanent status. Spouses Alwyn Ong Lim and Evelyn Lukang Lim Vs. Legazpi Hope Christian School, et al., G.R. No. 172818, March 31, 2009.